Judging by BoE MPC external member Adam Posen's remarks, the UK central bank will be jumping abard on the Fed's QE2 ship. That means lower long-term rates in the US and UK, and more global stimulus, which arguably only increases the upside risks for Australia:
"The risks that I believe we face now are the far more serious ones of sustained low growth turning into a self-fulfilling prophecy, and/or inducing a political reaction that could undermine our long-run stability and prosperity...
The case for doing more is about activism for sustaining a period of recovery from a low point, thereby preventing us from getting stuck in a long-term trap. The challenge for monetary policy today is not about fine-tuning developments in prices and output...
The data seems to me pretty conclusive, in the sense that if it was going to be a recovery that either was inflationary, or consistent with high interest rates and credit growth, to overcome the usual pattern of post-financial crisis stagnation, it would have been evident by now."
